After past scandals, UTA’s board adopts new policy governing ‘transit-oriented developments’

(Courtesy Hamilton Partners) Artist renderings of the new East Village transit-oriented development will look like at the Sandy Civic Center TRAX station.

The newly restructured Utah Transit Authority Board adopted a policy Wednesday aimed at ending years of agency scandals involving “transit-oriented developments” near rail stations.

Ordered by the Legislature, the shift is designed in increase transparency in choosing partners to develop projects on UTA-owned land near stations and will set objective ranking criteria in deciding when and where to do such projects. The policy also seeks to include more affordable housing in such developments and to more closely involve affected cities.

“It will be a process that the public can see. It will make sense to them,” said Paul Drake, UTA’s senior manager of real estate and transit-oriented development.

Such transit oriented developments, or TODs, are business and residential projects near transit stations that are designed to improve access to them and increase ridership. UTA often contributes extra land it obtained during construction of transit lines to those projects in exchange for a share of the profits.

However, state audits said UTA has made some sweetheart deals benefiting developers at the expense of taxpayers. Federal and other investigations looked into whether developers were doing favors for former UTA board members in exchange for their support.

Because of such concerns — and complaints over such things as high executive salaries and extensive travel — the Legislature restructured UTA last year, ordered changes with TODs and created a new full-time board to oversee the agency.

(Leah Hogsten | The Salt Lake Tribune) This file photo shows a sign that advertised a once-planned transit-oriented development around the Clearfield FrontRunner Station. Early plans fell apart, and the site is among many the UTA may consider for future development.

That board on Wednesday adopted a new TOD policy that includes creating a system to rank potential projects objectively, using criteria such as public support, land availability, market readiness, accessibility and appropriateness to include affordable housing.

Developers will be chosen jointly by UTA and affected cities.

Requests for proposals will be evaluated by UTA and the affected cities. Financial analysis of proposed projects will be done not only by UTA, but also by “a third-party expert consultant, to ensure that the terms are market feasible, ethical and compliant with applicable policy.”

A UTA advisory board also must approve of proposed projects, not just the top UTA Board.

“In the communities where we operate, we want them to feel like we are at least doing our best to be equitable in that process,” said UTA Chairman Carlton Christensen.

Some of the past controversies about UTA transit-oriented developments include:

A 2014 state audit criticized UTA for prepaying a developer, Jeff Vitek, $10 million to construct a parking garage — which it turns out he never built — just after he made a multimillion-dollar deal benefiting then-UTA board member Terry Diehl. It said the agency never got all the money back.

• The audit complained the same developer was chosen for another TOD even though he refused to supply required financial information. The audit, after consulting outside experts, said the resulting deal “unduly favored the developer” and was “far out of market.”

• In 2017, UTA made a deal to avoid federal prosecution by cooperating with a criminal probe into former UTA board members and others concerning possible misuse of taxpayer funds and development around train stations. Diehl later faced related charges, but all were eventually dismissed.

• UTA spent $15.56 million to build two large garages at the Jordan Valley TRAX station, which for years then sat mostly empty. They were erected in large part to help serve expected adjacent transit-oriented development, which ran into problems and was delayed.

• UTA cut ties with developer Thackeray Garn, an early partner on seven different TODs, after the agency discovered the company had invited two former UTA board members — Chris Bleak and Sheldon Killpack — to invest in a hotel at its TOD project in South Jordan after they had voted to approve it.

When Thackeray Garn threatened to sue UTA for canceling one of the partnerships in Clearfield, UTA gave it title to some land there valued at $1.5 million to settle claims.